In the fast lanes of life, no one can imagine living without their cars. You can easily drive your dream car if you lease it.
Your leasing company will also give you the option of buying the leased car. There are two kinds of car lease buyouts or payoffs:
1) Lease-end buyout (at end of lease period)
2) Early buyout (during the lease period)
Buying your leased car is always better than buying a used car from a dealer who is an absolute stranger to you. You know the car's history and if you have been maintaining it properly, then it is advantageous to you.
Also if you have surpassed the mileage restrictions and don't want to pay the exorbitant additional fees, buyout will be very useful.
For buying the car, you will need to avail an auto loan. But before that, it is essential that you consider few things. Prevention is better than cure, isn't it?
Read the document carefully
You need to be cautious while dealing in any financial matter. If your company doesn't allow an early buyout, it is not wise to go for it. The reason is that you will have to pay heavy penalties or extremely expensive termination fees. So, do read the lease agreement carefully.
The condition of the car
While going for lease buyout, carefully check the condition of the leased car.
If you have been maintaining it well, then you need not worry about it. But if the leased car has depreciated a lot, there is no point in buying it.
Understand the Purchase option price/Residual value
Your lease agreement will have a "Purchase Option Price" which is set by the leasing company. This is the price that you will have to pay if you decide to buy the leased car.
The price is set taking into account the value of the car at the end of the lease period and an additional purchasing fee.
Don't forget to see how your leasing company manages your payments. Few companies consider initial payments on the car as interest payments instead of payments on the principle. So, you may owe much more than the residual value.
Compare the residual value with the market value
You will be at the benefit only when the market value will be higher than the residual value of the car. You can determine the market value with the help of Kelly Blue Book or any other website that provides authentic data. If the car is valued lower than the residual value, then it will be better to end your lease and search for another car.
Negotiate for the price
Not everyone knows that the price is negotiable. The leasing company is also at the benefit with the buyout.
The company will gain from the buyout as it won't have to sell the car in an auction at a very lower price. It also buys the Residual Insurance which will pay for any difference between the price of the car and the residual value. So don't forget to make a good deal with the company as it not going to suffer in any way.
The loan process is not much different. Lenders will take a look at your credit score and decide the interest rates at which you will receive the loan from them.
Now you are at benefit if you have a great credit score, but you can find a lender even with a bad credit history. In that scenario, you will have to go to someone who specializes in bad credit car loans along with lease-buyout loans.
Lease buyout loans are very easy to get. So if the lease period is ending and you really like the car, go for lease buyout. Avail easy car loans and drive your very own car.